Google Faces CCI Investigation Over Sevice Fee Charged For In-App Payments: Report

In its order, the CCI has requested that Google clarify certain provisions pertaining to the in-app payment system.

The Competition Commission of India (CCI) has initiated an investigation into Google following allegations by several companies that the service fee charged by the US tech giant for in-app payments violates a previous antitrust directive. A regulatory order, seen by Reuters on Friday, revealed that Match Group, the parent company of Tinder, and Indian startups have urged the watchdog to scrutinise Google's User Choice Billing (UCB) system, claiming that it exhibits anti-competitive behaviour.

The CCI, in an order issued on Friday, expressed the view that an inquiry into the matter is necessary. The order is not publicly available, and Google has yet to respond to the request for comment.

In October, the CCI imposed a $113 million fine on Google, directing the company to allow third-party billing and cease its practice of compelling developers to use its in-app payment system, which incurs a commission of 15 per cent to 30 per cent.

Subsequently, Google introduced the UCB system, which enables alternative payment options alongside its own when making in-app digital content purchases. However, some companies have complained that the new system still imposes a high "service fee" ranging from 11 per cent to 26 per cent.

Match Group and the Alliance of Digital India Foundation argue that Google has failed to comply with the earlier antitrust directive, which specifically prohibited the imposition of "unfair and disproportionate" conditions.

In its order, the CCI has requested that Google clarify certain provisions pertaining to the in-app payment system both before and after the introduction of UCB. Additionally, Google is required to provide details of its policies related to the sharing of user and app developer data.

Google has a deadline of four weeks to respond to the order.

Previously, Google stated that the service fee supports investments in the Google Play app store and the Android mobile operating system. The fee ensures that these platforms can be distributed for free, while also covering expenses related to developer tools and analytic services.

The company, which considers India a key growth market, faces other regulatory challenges, including a setback that compelled it to modify its Android system marketing practices.